Singapore's Tightrope Walk On Taiwan

Singapore’s policy toward Taiwan is an example of the tightrope that Southeast Asian countries must walk in the new era of an increasingly powerful China asserting itself – particularly in relation to its “core interests,” including Tibet, Taiwan and (the newest addition to the “core”) the South China Sea. Last week’s carefully worded green light announcement by Singapore and Taiwan that the two economies and fellow World Trade Organization (WTO) members intended to explore a free trade agreement (FTA) is an excellent example of the difficult balance Southeast Asians must struggle to maintain in the face of an increasingly muscular neighbor. But heavy-handedness by Beijing also bears its share of reputational risk for China, which has thrown its weight around a lot lately, thereby raising concerns among its neighbors.

Singapore’s Dilemma

On the one hand, Singapore is bound to promote its national security interests, a patchwork quilt knit together by a myriad of strategic threads, notably combining proactive defense relationships built on interdependence, interoperability, and strong relationships and sustaining high levels of trade and investment. Singapore is, by its own account, a very small country with a population of just over 4 million including expatriates and competing with Hong Kong for the world’s most trade-dependent economy, with trade accounting for more than 300 percent of gross domestic product. Trade is its lifeblood. Defense and economic imperatives make Taiwan an important partner for Singapore.

On the other hand, Singapore is playing a careful hand with China – leading the way in helping its giant neighbor navigate its peaceful and constructive entry into the community of nations in Asia, particularly Southeast Asia. Singapore strives to help China and other major powers, including the United States and India, maintain balance by playing a useful intermediary role. Due to its closeness to China, Singapore is acutely aware of Beijing’s sensitivities – including those regarding Taiwan. For this reason, Singapore is in a unique position to negotiate with Taiwan on an FTA structure that China will feel more confident will not offend its sensitivities – or its “core interests.”

It follows that Singapore stands firm on its “one-China policy” when it comes to Taiwan. However, Singapore’s deep engagement with Taiwan is also consistent with its national security policy.

Strong Singapore-Taiwan Defense Links

Singapore and Taiwan have deep historical ties on defense and security. Lacking space for large-scale exercises and maneuvers, Singapore long relied on Taiwan’s support for their annual joint training exercises, the cornerstone of bilateral military-to-military cooperation, called Operation Starlight. For over 30 years, beginning in 1975, Singapore trained troops in Taiwan under this program. At the peak of joint cooperation in the 1990s, Singapore trained 15,000 troops in Taiwan. Sino-Singaporean military cooperation has since eclipsed that between Singapore and the “Republic of China Army” on Taiwan; a recent example of Sino-Singapore joint training was a large-scale counterterrorism exercise creatively named Cooperation 2009. However, the Taiwan-Singapore ties are still strong.

Trade Is a Core Interest

On August 5, the Taipei Representative Office in Singapore and the Singapore Trade Office in Taipei announced they would “explore the feasibility of a bilateral economic cooperation agreement on a par with a free trade agreement.” They indicated that the agreement would be within the framework of the WTO and that they planned to meet later this year to discuss the agreement. The response from Beijing, after inevitable consultation with Singaporean officials, while far from a ringing endorsement, was at least a tepid thumbs up. A Taiwan Affairs Office official in Beijing, addressing the issue, said: "We believe Singapore will adhere to the one-China policy, and properly handle its economic and trade relations with Taiwan accordingly."

Taiwan, like Singapore, has a trade-dependent economy. Singapore is its sixth-largest trading partner. Taiwan is also concerned about sustaining its link to trade-opening measures globally and particularly in Asia. From Taipei’s perspective, recent discussions of Asian regional trade and security architecture focusing on the East Asia Summit (EAS) model are unnerving. If focus shifts from the Asia Pacific Economic Cooperation (APEC) forum, a grouping of 21 “economies,” toward the EAS and the Trans-Pacific Partnership (TPP) trade negotiations, Taiwan could be left out. Given that trade patterns in the wake of the global economic crisis are dynamic and shifting, being cut out of new preferential trade mechanisms could be devastating to the Taiwan economy.

Therefore, the FTA with Singapore would anchor Taiwan in ASEAN. ASEAN is important strategically as well as practically (representing 650 million people with a $1.4 trillion gross domestic product) because nearly all countries involved agree ASEAN is the core of the new trade and security architecture in the region. Accordingly, Taiwan’s Ministry of Economic Affairs announced it is considering Vietnam and Indonesia as new potential free trade partners.

Will China Apply Pressure?

Singapore’s venerable president S.R. Nathan is kicking off an eight-day visit to China this week. He is likely to hear firm and unyielding, though not completely insensitive, views on his country’s plans to move forward with Taiwan on trade. Given recent Southeast Asian reactions to China’s revealingly aggressive reactions to U.S. proposals to resolve South China Sea disputes on a multilateral basis using international law, China may decide to keep its watchful eye on Singapore’s and Taiwan’s trade negotiations hidden from public view. Rest assured Southeast Asian policymakers are watching this space closely, as the rights to trade and defend one’s country are fundamental to sovereignty. That China’s “core interests” on the question of Taiwan’s sovereignty may affect the rights of others to exercise their own sovereignty will continue to raise anxiety and well-founded concerns in Asia and elsewhere.
In the Issue

The Week that Was

Burma elections on November 7

The United States and Vietnam conduct joint naval exercises

Preah Vihear temple dispute

The Week Ahead

Indonesia will celebrate its 65th Independence Day on August 17

Australia will elect members of the 43rd Parliament of Australia

THE WEEK THAT WAS

AUSTRALIA

Federal election update. Latest polls favor Prime Minister Julia Gillard’s Labor Party, but pundits agree the August 21 national election will be close. Both Labor and the Liberal Party lead opposition coalition, represented by candidate Tony Abbott, are trying to appeal to the median voter, offering similar policy platforms and making the race about personality and party loyalty. Polls show the public largely against the mining super tax and strongly in support of proposals for a new paternal leave program. In terms of foreign policy, both parties value stability and continuity; however, the Liberal party favors a more bilateral approach, while Labor’s strategy focuses on multilateralism.

BURMA/MYANMAR

Burma elections on November 7. After months of speculation about the date for the national elections, the military junta announced last week that "multi-party general elections for the country's parliament will be held on Sunday 7 November.” The government has also designated constituencies for its national and regional parliaments in preparation for the elections. Nearly 40 parties have registered for the election. At least 11 parties are believed to be regime or proxy-regime parties. The upcoming elections will select 330 civilian seats in the 440-member House of Representatives. Under the constitution adopted last year, the remaining seats will be filled by military personnel. Most opposition parties are targeting only a few seats, while the 26 parties representing ethnic minorities will contest only seats where they have substantial populations.

Opposition party intimidated by police. The Democratic Party in Myanmar, registered to run in the upcoming elections, has complained to the Election Commission about intimidation of its members by security personnel. The Democratic Party is backed by the three "princesses"—daughters of former top ministers—who are said to be childhood friends with Aung San Suu Kyi. The party’s chairman, Thu Wai, said that the police were visiting their members’ homes and asking them for their curriculum vitae and photos. Another party, the Union Democratic Party (UDP), has refused to participate because the elections would not be free and fair.

Thai-Burma border closure continues. Burmese authorities closed the Friendship Bridge over the Moei River in early July to protest against Thailand’s construction of a river wall. Bangkok insisted that it will assist its Burmese counterparts with the construction and believes that it is necessary to define international borders. As of now, dialogue between the two nations has come to an impasse and the border is closed for the fourth week, increasing the unemployment rate in Burma’s Myawaddy Township and losing approximately $2.7 million per day in Thailand’s trade revenue.

VIETNAM

The United States and Vietnam conduct joint naval exercises. On August 11, the United States and Vietnam began a weeklong naval exercise in the South China Sea amid mounting Chinese concern over its maritime territorial claims. The guided-missile destroyer USS John S. McCain made a port call at the central Vietnamese city of Danang. This joint exercise celebrates 15 years of diplomatic ties between the two countries since the war officially ended in 1975. Meanwhile, China is carefully watching the U.S.-Vietnam exercises as well as the U.S.-Republic of Korea joint exercises that kicked off yesterday.

SOUTH CHINA SEA

Mounting tensions over South China Sea. Chinese Foreign Ministry spokeswoman Jiang Yu said on December 13 that China has “indisputable sovereignty” over the Xisha Island (Paracel Islands) and adjacent waters in the South China Sea. This comment comes after her Vietnamese counterpart, Nguyen Phuong Nga, said that Chinese seismic exploration in the region has violated Vietnam’s sovereignty. China continues to oppose all claims to the waters as well as what it sees as increasing U.S. interference in the dispute. Dai Xu, a Chinese Air Force colonel, recently wrote an article asserting that the United States should not be allowed to “coerce China to give in on matters concerning China’s territory and maritime sovereignty” and to “jeopardize China’s national interest by collaborating with neighboring countries.”

THAILAND

19 Red Shirts indicted on terrorism charges. Government prosecutors have completed their review of the terrorism charges against 19 Red Shirt supporters, including three of the movement’s leaders, Veera Musikapong, Jatuporn Prompan, and Kokaew Pikulthong. Suspects were arrested and have been in detention for three months. The Red Shirt movement, under the banner of the United Front for Democracy against Dictatorship (UDD), is an anti-government movement that is responsible for the street violence in April and May earlier this year.

Court rejects Thaksin’s appeal. Thailand’s Supreme Court rejected the former prime minister’s appeal regarding seizure of $1.4 billion of his assets. The ruling came after two hours of deliberation among 119 judges. Thaksin did not provide any new evidence in his appeal. In February, he was stripped of his fortune for abuse of power and charges that he illegally gained his wealth through conflict of interest during his premiership.

Puea Thai issues legal complaint against PAD’s temple rally. The Puea Thai party sought legal action against the People’s Alliance for Democracy (PAD) and its subsidiary, the Thai Patriot Network, over their violation of the emergency decree. The law stipulates that there can be no gathering of five individuals or more in a public space. The PAD and TPN rallies at Government House and UNESCO over the border dispute with Cambodia are a clear violation of this decree, as 300 protestors took part.

CAMBODIA

Preah Vihear temple dispute. Cambodia and Thailand both claim a 1.8 square-mile patch of land near the Preah Vihear temple located at their shared border. Although the International Court of Justice ruled in 1962 that the temple belongs to Cambodia, the Thai government, under pressure from nationalists, continues to claim that the disputed area is part of the Si Sa Ket’s Karntharalak district, while Cambodian officials insist that it lies in Cambodia’s Preah Vihear province. The dispute reached another high point last week with the following developments: On August 9, Cambodian prime minister Hun Sen asked for UN intervention, claiming that Thailand had threatened to use military force and that continued debate “may cause bloodshed.” In response, Thai prime minister Abhisit Vejjajiva denied Hun Sen’s accusations and said that the Cambodian government is “trying to portray a bad image of the Thai Government.” The following day, Prime Minister Abhisit sent letters to the UN and the UN Security Council, asserting that he had been misquoted. On August 11, both countries agreed to postpone indefinitely the 7th General Border Meeting (GBC), originally set for August 27–28 in Pattaya. On August 13, it was reported that UN Secretary General Ban Ki-moon will visit Cambodia on October 27–28 to discuss the border dispute.

Cambodia and Iran increase bilateral ties. During a visit to Iran on August 10–11, Cambodian foreign minister Hor Namhong met with Iranian president Mahmoud Ahmadinejad. The two signed two Memoranda of Understanding (MOU) to boost bilateral ties. In addition to lifting the visa requirements for political passports, there would be increased cooperation in energy, investment, tourism, and agriculture.

Some Khmer Rouge survivors accept sentence. A group of Khmer Rouge survivors, who originally criticized the United Nation’s 19-year prison sentence for prison chief Duch as too lenient, have recently come to terms with the sentence. Three of the survivors, after receiving copies of the court ruling, raised their copiesinto the air and said: “This is justice that we have been waiting for.”

INDONESIA

New ambassador arriving in Washington, D.C. Indonesia’s new ambassador to the United States, Dino Djalal, is set to arrive in early September. He is reportedly scheduled to receive his credentials from President Obama around the middle of that month, after which he will be officially in charge at the Embassy of Indonesia.

Radical cleric arrested and charged with planning terrorist attacks. Abu Bakar Bashir, cofounder of Jema’ah Islamiyah, a militant network linked to al-Qaeda, was charged with masterminding terror attacks, a crime that carries the maximum penalty of death in Indonesia. Police have sufficient evidence to link Bashir to high-profile assassinations and attacks on foreigners in Jakarta. According to Lt. General Ito Sumardi, chief detective for the national police, the investigating team reportedly compiled evidence by monitoring Bashir’s bank records, tapping phones, and compiling confessions from other suspected militants.

Indonesia, South Korea to begin jet fighter production in 2012. Titled “the FSX project,” Indonesia and South Korea announced that they are ready to begin a joint project on jet fighter production in 2012. The project is widely perceived as a pilot project for revitalization of Indonesia’s defense industry.

MALAYSIA

Three terror suspects held in Malaysia. Malaysian authorities arrested three suspected Islamist militants, two Malaysians and an Indonesian, believed to have close ties with radical Indonesian Muslim preacher Abu Bakar Bashir. They are being held under Malaysia's Internal Security Act, which allows indefinite detention without trial. Despite the severity of the alleged crime, human rights groups are demanding due process via the judiciary. Officials reportedly said that those accused were working to expand Jema'ah Ansharut Tauhid’s operations into Malaysia.

‘Ramadan March for Freedom’ mission reaches Gaza. Organized by the Malaysian Islamic Organisations Consultative Council (Mapin), the mission comprised 44 volunteers who worked to continue the efforts of the Freedom Flotilla. Mapin’s goal is to ensure that humanitarian aid reaches Palestinians in Gaza through the Rafah border crossing.

Malaysia, Philippines committed to enhancing border security. During a meeting with Secretary of National Defence Voltaire T. Gazmin of the Philippines, Defense Minister Dato Seri Dr. Ahmad Zahid bin Hamidi of Malaysia committed to ensure security at the border and to tackle illegal immigration. Minister Zahid and his party also visited the International Monitoring Team (IMT) in Cotabato City, amid concerns Kuala Lumpur will be replaced as facilitator in the peace talks between the guerrillas and the Philippine government.

PHILIPPINES

Aquino to engage in peace talks with Muslim rebel group. Parliament and President Benigno “Noynoy” Aquino have expressed full political will to end the insurgency in the Southern Philippines carried out by the Moro Islamic Liberation Front (MILF) after Ramadan. The Aquino administration recognizes past agreements and has been urged by provincial councils to resume peace negotiations immediately. Talks were suspended after the Memorandum of Agreement on Ancestral Domain was aborted.

Government hands out surplus rice. The government announced it would hand out 50,000 tons of surplus grain to children and would free up 480 warehouses. Selling the surplus amount would put downwards pressure on prices; thus, freeing up warehouses by way of the feeding program to 49,000 daycare centers is more acceptable. The surplus rice came from over-importation during the Arroyo administration. The Philippines is one of the world’s largest rice importers.

SINGAPORE

Singapore headed for ‘healthy’ slowdown. The Ministry of Trade and Industry (MTI) announced on August 10 that the momentum of economic growth is expected to slow after expanding by nearly 18 percent in the first half of 2010. Irvin Seah, an economist with Singapore's DBS bank, said the projected slow-down in growth for the second half was a healthy sign and ruled out a double-dip recession. The deceleration of growth is perceived as a healthy moderation of economic activity.

LAOS

Laos plans to build 20 power plants by 2020. The director general of the state-run electric power generation company, Electricite du Laos, Khammany Inthirath, announced on August 9 that the country is planning to build an average of two new hydropower plants every year until 2020. The government announced that it plans to turn the country into “the power generation hub of Southeast Asia.” Laos, a country rich in water resources, currently has 14 hydropower plants with a total capacity of 2,540 megawatts, is said to be aiming to become the “battery” of Southeast Asia. Environmental groups such as the World Wildlife Fund (WWF) have expressed profound concerns about the damming of the Mekong River; the concerns are based on extensive research and modeling.

August 9, 2010: Celebration 55 years of U.S.-Lao relations. On Monday, August 9, the United States celebrated 55 years of diplomatic relations with Laos. Secretary of State Hillary Clinton reaffirmed the United States’ commitment to the prosperous development of Laos and its desire to cooperate on various areas of mutual concern, including accounting for prisoners of war (POWs)/MIAs and clearing unexploded munitions.

TIMOR-LESTE

UN peacekeepers deliver aid supplies to flood victims. The United Nations peacekeeping mission in Timor-Leste is distributing relief supplies to flood-stricken communities in the southwest of the small Southeast Asian country.

ASEAN, UN, USAID conduct major international exercise to prepare for severe pandemic. The exercise, a global first, will take place in Phnom Penh, Cambodia, the week of August 16–20. More than 170 high-level participants from governments, UN agencies, international bodies, and NGOs are projected to attend. The event aims to improve the capabilities of ASEAN states, both individually and collectively, to respond to severe pandemic events via multi-sector preparedness and responses. The initiative is a result of increased recognition of the crippling damage and magnitude of pandemics in Southeast Asia, as well as the need to strengthen coordination in regional affairs.

Asian growth attracts Sharia banks from Gulf. Al Salam Bank BSC, based in Manama, Bahrain, plans to invest $500 million of Islamic funds in Asia, joining Saudi Arabia’s Al Rajhi Group in capitalizing on the region’s growth. The funds are targeted at real estate, agriculture, and food in the next five years, focusing on Malaysia, Indonesia, and Singapore. Banks and financial institutions in the Persian Gulf are turning to Asia to profit from the economic recovery and rising property prices. Yousif A. Taqi, CEO at Al Salam, noted that “our existing investment in Asia is $200 million and in Europe it won’t exceed $100 million.”

JPMorgan sees more investor interest in “resilient” Southeast Asia stocks. According to a report released by JPMorgan, Southeast Asia’s booming economic growth and an equities rally are resulting in increasing investor interest in the region. Benchmark stock indexes in Thailand, Indonesia, the Philippines, and Malaysia have been remarkably resilient in a volatile economic climate. The benchmark stock indexes in Indonesia, Thailand, and the Philippines have rallied more than 15 percent in this year while Malaysia, the fourth-best performer, gained 6.7 percent in the same period.

ADSOM Retreat. The ASEAN Defense Senior Officials’ Meeting (ADSOM) Retreat was held on August 5 in Vietnam. Delegates reviewed the development of ASEAN, the implementation of the ASEAN Defense Ministers’ Meeting (ADMM) initiatives, and the result of the ADSOM Working Group on ADMM +8, as well as the preparations and final content of the ADMM Retreat and ADMM +8, which are expected to be held in Hanoi on October 12, 2010. U.S. secretary of defense Robert Gates is confirmed to attend the meeting.

ASEAN women meet in Malaysia. The Vietnamese and Lao embassies in Malaysia held a meeting of ASEAN women working on Malaysian soil to advance solidarity and mutual understanding. Participants at the August 10 meeting shared and discussed their professional and personal experiences in Malaysia. The initiative is premised on building an ASEAN community of peace, stability, and prosperity.

THE WEEK AHEAD

Indonesia will celebrate its 65th Independence Day on August 17. The Proclamation of Indonesian Independence was read at 10:00 a.m. on Friday, August 17, 1945. The declaration started the Indonesian National Revolution, a five-year diplomatic and armed resistance against the Netherlands until it officially acknowledged Indonesia's independence in 1949.

Australia will elect members of the 43rd Parliament of Australia and general elections will be held on Saturday, August 21; 14 million Australians are enrolled to vote.

ASEAN Economic Ministers (AEM) meeting August 20–22. Ministers will meet to discuss economic cooperation within and without ASEAN, including structural and institutional reforms, trade policies, and connectivity initiatives in the region. The AEM-42 is a key forum in preparation for the 17th ASEAN Summit in October. The full schedule of events is available at http://aem42.org/Show.aspx?newsid=558&catid=063003.

Malaysia will commemorate its 53rd anniversary of independence on August 31. On August 31, 1957, the British peacefully ceded colonial rule over what was then known as the Federation of Malaya.

CSIS Southeast Asia Program Event: The Honorable Dr. Ng Eng Hen, Singapore’s Minister for Education and Second Minister for Defense, will be leading a delegation from the Ministry of Education, to the US from September 8 to 12. CSIS Southeast Asia plans to host the minister during his visit.

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